FHA Single Family Housing Policy Handbook 4000.1, Part I — r. Mergers, Acquisitions, and Reorganizations (04/10/2025)

FHA Single Family Housing Policy Handbook 4000.1, Part I — r. Mergers, Acquisitions, and Reorganizations (04/10/2025)

r. Mergers, Acquisitions, and Reorganizations (04/10/2025) i. Merger or Consolidation FHA’s treatment of an FHA-approved Mortgagee for approval purposes following a merger will depend on the prior approval status of the surviving entity. I. DOING BUSINESS WITH FHA A. FHA Lenders and Mortgagees (09/20/2021) 7. Post-approval Changes Handbook 4000.1 63 Last Revised: 11/26/2025 (A) Duties of a Non-surviving FHA-Approved Mortgagee (1) Standard A non-surviving FHA-approved Mortgagee that holds a portfolio of FHA-insured Mortgages must transfer those Mortgages to a Mortgagee approved by FHA to service FHA Mortgages. If a surviving FHA-approved Mortgagee acquires all of the non-surviving FHA- approved Mortgagee’s outstanding FHA Mortgages, all of these Mortgages will be transferred in FHA systems to the surviving entity when the merger is processed. A non-surviving Mortgagee remains responsible for the payment of insurance premiums and compliance with all other obligations associated with the FHA Mortgages until the Mortgages are transferred and the mortgage record changes are reported accurately to HUD through FHAC, Electronic Data Interchange (EDI), or Business to Government (B2G). Once the non-surviving Mortgagee ceases to exist or its approval is terminated, whichever comes first, the non-surviving Mortgagee must not: • accept any new applications for FHA Mortgages; • hold FHA Mortgages; • service FHA Mortgages; or • submit claims to HUD. (B) Duties of a Surviving Entity (1) FHA-Approved Mortgagee That Survives a Merger with a Non-approved Entity (a) Standard An FHA-approved Mortgagee that is the surviving entity in a merger with a non-approved entity must notify FHA of the merger. The surviving FHA-approved Mortgagee may register each of the non- surviving entity’s branch offices that will remain open under the auspices of the surviving Mortgagee and pay the branch office registration fee(s) for the branch office(s) it chooses to register. (b) Required Documentation An FHA-approved Mortgagee that is the surviving entity in a merger with a non-approved entity must submit a Change Request to FHA containing the following: I. DOING BUSINESS WITH FHA A. FHA Lenders and Mortgagees (09/20/2021) 7. Post-approval Changes Handbook 4000.1 64 Last Revised: 11/26/2025 • a letter, signed by a Corporate Officer, that informs FHA of the merger. The letter must include information that: o provides the FHA Lender IDs for the surviving FHA-approved Mortgagee involved in the merger; and o provides the date the merger occurred or will occur; • a copy of the legal document evidencing the merger; • if a Supervised Mortgagee, a copy of the letter from the Federal Banking Agency that approved the merger; and • if applicable, a letter describing how the non-servicing Mortgagee will dispose of the FHA-insured Mortgages that it held or serviced that have not been acquired by a surviving FHA-approved Mortgagee. (2) Two or More FHA-Approved Mortgagees Merge (a) Standard An FHA-approved Mortgagee that is the surviving entity in a merger with another FHA-approved Mortgagee must notify FHA of the merger. The surviving Mortgagee may register each of the non-surviving Mortgagee’s branch offices that will remain open under the auspices of the surviving Mortgagee and pay the branch office registration fee(s) for the branch office(s) it chooses to register. (b) Required Documentation An FHA-approved Mortgagee that is the surviving entity in a merger with another FHA-approved Mortgagee must submit a Change Request to FHA containing the following: • a letter, signed by a Corporate Officer, describing the merger; • a copy of the legal document evidencing the merger; and • if a Supervised Mortgagee, a copy of the letter from the Federal Banking Agency or other supervisory authority that approved the merger. (3) Non-approved Entity That Survives a Merger with an FHA-Approved Mortgagee (a) Standard A non-approved surviving entity must become an FHA-approved Mortgagee in order to originate, underwrite, close, endorse, service, purchase, hold, or sell FHA-insured Mortgages, or to submit claims on Mortgages to FHA, including those previously held by the non-surviving Mortgagee. I. DOING BUSINESS WITH FHA A. FHA Lenders and Mortgagees (09/20/2021) 7. Post-approval Changes Handbook 4000.1 65 Last Revised: 11/26/2025 Immediately after becoming approved, the Mortgagee may register each of the non-surviving entity’s branch offices that will remain open under the auspices of the surviving Mortgagee and pay the branch office registration fee(s) for the branch office(s) it chooses to register. When new FHA Lender IDs for these branch offices are issued, the surviving Mortgagee must cease originating cases under the non-surviving Mortgagee’s old FHA Lender ID numbers. (b) Required Documentation A non-approved surviving entity must submit an online application for FHA approval containing all information and documentation required to demonstrate eligibility for approval. The entity must also submit with its application a letter signed by a Corporate Officer that describes the merger, and, if applicable, the surviving entity’s intentions regarding the non- surviving Mortgagee’s outstanding portfolio of FHA Mortgages and indemnifications. ii. Sale, Acquisition, or Disassociation FHA’s treatment of a sale, acquisition, or disassociation of an FHA-approved Mortgagee depends on whether the FHA-approved Mortgagee dissolves, continues as a subsidiary or corporate affiliation of the acquiring entity, or becomes an independent entity. (A) An FHA-Approved Mortgagee Is Acquired by Another Entity (1) Dissolution of Acquired FHA-Approved Mortgagee (a) Duties of Acquired FHA-Approved Mortgagee (i) Standard If an FHA-approved Mortgagee being acquired will be dissolved into another entity, it must voluntarily withdraw its FHA approval. The acquired Mortgagee must transfer any FHA-insured Mortgages in its portfolio to a Mortgagee approved to service FHA-insured Mortgages. The dissolving Mortgagee must continue to pay insurance premiums due and meet all other obligations associated with its FHA Mortgages until the Mortgages are transferred and the mortgage record changes are reported accurately to HUD in FHAC, EDI, or B2G. (ii) Required Documentation The FHA-approved Mortgagee being acquired must submit a Change Request to FHA in the form of a letter, signed by a Corporate Officer, that I. DOING BUSINESS WITH FHA A. FHA Lenders and Mortgagees (09/20/2021) 7. Post-approval Changes Handbook 4000.1 66 Last Revised: 11/26/2025 informs FHA of the details regarding the acquisition and requests the withdrawal of its FHA approval. The Mortgagee must submit a copy of the articles of dissolution, a letter describing the acquisition, and, if applicable, how it will or has disposed of FHA Mortgages that it held or serviced. (b) Duties of Acquiring Entity (i) Standard If a non-approved entity is acquiring and dissolving an FHA-approved Mortgagee, the non-approved entity must become an FHA-approved Mortgagee to originate, underwrite, close, endorse, service, purchase, hold, or sell FHA-insured Mortgages, or to submit claims on FHA Mortgages, including those previously held by the dissolved Mortgagee. Immediately after becoming approved, the Mortgagee may register each of the dissolved Mortgagee’s branch offices that will remain open under the auspices of the acquiring entity and must pay the branch office registration fee(s) for the branch office(s) it chooses to register. (ii) Required Documentation An FHA-approved Mortgagee that acquires and dissolves another FHA- approved Mortgagee is required to submit a Change Request to FHA through LEAP. A non-approved entity must submit an online application for FHA approval containing all information and documentation required to demonstrate eligibility for approval. The entity must also submit with its application a letter signed by a Corporate Officer that describes the acquisition, and, if applicable, the acquiring entity’s intentions regarding the dissolved Mortgagee’s outstanding portfolio of FHA Mortgages. (2) Continuation as Subsidiary or Corporate Affiliation (a) Acquisition by an FHA-Approved Mortgagee (i) Standard If the FHA-approved Mortgagee being acquired will continue to operate as a subsidiary or corporate affiliation of the acquiring FHA-approved Mortgagee, the acquired Mortgagee may continue to operate under its existing FHA Lender ID as a separately approved Mortgagee. I. DOING BUSINESS WITH FHA A. FHA Lenders and Mortgagees (09/20/2021) 7. Post-approval Changes Handbook 4000.1 67 Last Revised: 11/26/2025 (ii) Required Documentation Acquired FHA-Approved Mortgagee - The acquired Mortgagee must submit a Change Request to FHA in the form of a letter, signed by a Corporate Officer, informing FHA that it has been acquired and will continue to operate as a subsidiary or corporate affiliation of the acquiring FHA-approved Mortgagee. Acquiring FHA-Approved Mortgagee - The acquiring FHA-approved Mortgagee must submit a Change Request to FHA in the form of a letter, signed by a Corporate Officer, that: • describes the transaction; • lists the names of all parties; • lists the FHA Lender IDs of all parties; • states the date of the acquisition; and • stipulates that the acquired Mortgagee will continue as a subsidiary or corporate affiliation of the acquiring FHA-approved Mortgagee. (b) Acquisition by a Non-approved Entity (i) Standard If the acquired FHA-approved Mortgagee will continue to operate as a subsidiary or corporate affiliation of the acquiring entity, it may continue to operate as an FHA-approved Mortgagee under its own name, whether or not the acquiring entity becomes FHA-approved. (ii) Required Documentation The Mortgagee must submit a Change Request to FHA in the form of a letter, signed by a Corporate Officer, describing the acquisition and its future operating status. (B) An FHA-Approved Mortgagee Acquires a Non-approved Entity (1) Standard If an FHA-approved Mortgagee acquires a non-approved entity the Mortgagee must notify FHA of the acquisition. If an FHA-approved Mortgagee acquires a non-approved entity and the acquired entity will operate with a separate EIN as a subsidiary or corporate affiliation of the Mortgagee, the non-approved entity must apply for separate approval in order to originate, underwrite, close, endorse, service, purchase, hold, or sell FHA- insured Mortgages. I. DOING BUSINESS WITH FHA A. FHA Lenders and Mortgagees (09/20/2021) 7. Post-approval Changes Handbook 4000.1 68 Last Revised: 11/26/2025 (2) Required Documentation If an FHA-approved Mortgagee acquires a non-approved entity the Mortgagee is required to submit a Change Request to FHA in the form of a letter, signed by a Corporate Officer, describing the acquisition. If an FHA-approved Mortgagee acquires a non-approved entity and the acquired entity intends to originate, underwrite, close, endorse, service, purchase, hold, or sell FHA-insured Mortgages operating with a separate EIN as a subsidiary or corporate affiliation of the Mortgagee, the non-approved entity must submit an online application for FHA approval containing all information and documentation required to demonstrate eligibility for approval. The entity must also submit with its application a letter signed by a Corporate Officer that describes the acquisition. (C) An FHA-Approved Mortgagee Becomes Independent (1) Standard When an FHA-approved Mortgagee that has been a subsidiary or part of a larger entity becomes independent, the Mortgagee must notify FHA of the disassociation. If the disassociation results in changes to the Mortgagee’s Corporate Officers or Principal Owners, the Mortgagee must submit the proper notifications to FHA as described in this Handbook 4000.1. (2) Required Documentation When an FHA-approved Mortgagee that has been a subsidiary or part of a larger entity becomes independent, the Mortgagee must submit a Change Request to FHA in the form of a letter, signed by a Corporate Officer, describing the details of the disassociation.

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